Business Growth Model

[braden]

Hello,

My brother-in-law has asked me to help him find a solution to his problem.
What he wants to do is find an equation that allows him to determine growth of a business on a year-to-year basis with a target goal in mind.

For example,

At year 1, a business has 100% of its revenue, how much growth must the business experience each year to be able to achieve 400% revenue by year 5?

The above example is the actual problem that he needs solved, but I am not sure how to do it. I believed this would best be solved with Calculus so please forgive me if I am posting on the wrong board. BTW, the reason he is looking for an equation is because he would like to use it in Excel to calculate growth for his business' life span.

Thanks,

Braden

 

[tkhunny]

Start = 100% = 1.00
Stop = 400% = 4.00
Years = 5
Annual = A

Start*(1+A)^Years = Stop

If you need help evaluating, let us know.

 

[braden]

Okay, disregard previous edit of this reply.

Thank you to you and also to soroban. I did not even realize that this was a compound interest problem. I really overanalyzed this one! Wouldn't have been able to do it without you guys.

Thanks,

Braden